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Financial regulators crack down on 'finfluencers' for alleged front-running schemes

Published: 23 Mar. 2026, 09:42 Updated: 23 Mar. 2026, 14:24

The Financial Services Commission plaque is seen at the government complex in Jongno District, central Seoul, on Sept. 7, 2025. [YONHAP]

Financial authorities have referred several “finfluencers” to prosecutors for alleged front-running schemes, warning investors against blindly following stock tips on social media.

The Financial Services Commission (FSC) uncovered multiple cases in which finfluencers — a portmanteau of “finance” and “influencer” — used online broadcasts and chat rooms to profit from stock recommendations, the FSC said Sunday.

The schemes involved buying shares in advance and selling after retail investors drove up prices, authorities said.

One stock-broadcast panelist purchased shares before recommending them on air, then sold them after prices rose amid investor demand, according to the Financial Supervisory Service (FSS).

The panelist first urged members of a paid chat room to buy certain stocks, then made the recommendation publicly through broadcasts. Once buying interest surged, the panelist sold the shares they had prepurchased and encouraged members to exit as well.

The FSS identified the case through a tip-off and referred the individual to prosecutors.

A separate Telegram-based operator was also referred to prosecutors for repeated large-scale front-running. The operator allegedly attracted subscribers by exaggerating investment track records, then bought stocks in advance before recommending them.

The operator claimed they didn't recommend stocks that they already held, but investigators found that they had, in fact, front-run their scheme.

The Financial Supervisory Service headquarters in Yeouido, western Seoul, is seen on Aug. 15, 2022. [NEWS1]

The FSS detected suspicious activity during routine market surveillance, launched an investigation and notified prosecutors through an emergency measure by the Securities and Futures Commission, the FSS said.

Regulators are expanding monitoring of social media-driven market manipulation. Authorities are tracking not only front-running but also attempts to move stock prices using false information, rumors or exaggerated claims about new business ventures.

The FSC will strengthen coordination with the FSS and the Korea Exchange to enhance surveillance and investigative capacity, the commission said.

A special reporting period for unfair trading will begin on Monday. Tips can be submitted through the FSC, the FSS’s illegal finance reporting center or the Korea Exchange.

Whistleblowers may receive rewards of up to 30 percent of illicit gains.

The FSC urged investors to remain cautious, warning that following finfluencer recommendations without verification could lead to losses and that participating in such schemes may result in criminal penalties.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY HAN YOUNG-HYE [[email protected]]